Top Menu

Netflix gracious to cable following Q1 announcement

When you're big, and Netflix (Nasdaq: NFLX) is now the biggest with 23.6 million subscribers, you can afford to be gracious. That appears to be the message coming from Netflix which announced the addition of 3 million subscribers in its first quarter, earnings of $60.2 million that rocketed up 87 percent from the same period a year ago and revenue that was up 46 percent to $719 million.

Even as these results reflected that the over-the-top video provider is a competitive force with which cable will need to reckon, company executives in a letter to shareholders and later during an earnings Q&A adopted a conciliatory tone, noting that Netflix gains came more as a result of a down economy than stealing cord cutting customers from pay TV providers.

"Netflix is a supplement channel to MVPD (multichannel video programming distribution)," Netflix said in the shareholder letter, and while it expects to continue to get bigger it believes "MVPD cord cutting will be minimal to non-existent."

The OTT humbled itself even further by agreeing with Comcast (Nasdaq: CMCSA) Chairman-CEO Brian Roberts' description of Netflix as "rerun TV."

"While we don't plan to use that line in our next marketing campaign, he is fundamentally correct. Our focus for TV shows is on prior season TV and completeness of series," the letter said, although Netflix has created a content splash recently by developing its own original program, House of Cards.

Beyond cable, the OTT purveyor was a bit more wary--but still welcoming--to any moves Dish Network (Nasdaq: DISH) might make now that it owns the Blockbuster brand and stores. "We really don't know what Dish is up to but presumably they paid a couple of hundred million for Blockbuster not for the technology but for its brand ... which would be consistent to do if they had plans to launch a service with a fair amount of content," said Netflix Founder-CEO Reed Hastings during the Q&A. "A big market attracts a lot of competition."